In the Zero Energy Ready Home we chose to use a Navien tankless ultra-condensing water heater, model NPE-180S. We found it to be the most efficient natural gas water heater we could find at a decent price. In fact, the unit with the flush valve kit included only cost about $400 more than a standard power-vent tank water heater. It also has a 15 year warranty on the heat exchanger, whereas a power-vent model only has a 6 or 9 year warranty on the tank. Also, even the best power vent water heaters are only about 70% efficient, so 30% of the energy created when the gas is burned goes right out the exhaust and is wasted. The Navien unit has an incredible energy factor of .97, meaning that almost 100% of the gas burned goes directly to heating the water.
The unit draws its own combustion air from outside, not extracting heated air from the home like other models. And the best part of the tankless unit is that it only comes on when hot water is called for. Any other time of day it is off and using virtually no power (except the LED read-out), unlike a tank heater that must occasionally turn on to maintain the temperature of the water in the tank. To find out more about the water heater we used, follow this link: